tv Nancy Grace HLN October 30, 2009 1:00am-2:00am EDT
the actions taken to protect them. but the despair in that sense. >> the taxpayer is the interim lender. >> they are adapting to a system that has outgrown. it exists today. the alternative way is to begin to create an insurance fund that will create explicit insurance spend more moral hazard. >> would in bankruptcy be faster? -- would not bankruptcy be faster? i think it is 60 months to settle this. >> of lehman makes this clear and compelling.
we college resolution authority. . . a bankruptcy like system, we call it a resolution authority for banks and thrifts because banks are different. if they lose the capacity to fund, then they can cause enormous damage to the system as a whole. you need a slightly different regime from banks because banks are different from regular companies. >> let's say an institution the size of citi or bank of america size of citi or bank of america failed, how many institutions d have to be assessed to cover the cost of that resolution? >> again, the proposal we made is that banks above a certain size would be -- would have to pay a fee because they would benefit indirectly and directly from the actions taken to contain the risk of panic. >> they benefit because there's one less competitor, is that what you're saying? >> no, no, no. because in the absence of action to manage the failure in a way that's safer for the system, it
does convey broader benefits. it's not like -- so again, that's should bear some -- the choice is -- >> what would be those benefits? >> the way financial panics work is that viable institutions face the risk they lose their funding and, therefore, have to collapse. that's the financial panics that defined the second half of the 19th century, the first quarter of this century, helped produce the great depression. what we didn't do is extend those protections to institutions very much like banks. again, the alternative approach is to say the taxpayer would be there in the front of the line absorbing the cost of that failure. that we think is not necessary and would be a mistake. >> all right. then do you think that the government control and concentration of power and the increased unchecked power to
control both the consumers and business as outlined is the answer? this is a huge amount of power going to the administration. >> again, let's step back. right now the congress of the united states has given more than four federal agencies and a whole number of other agencies the power to do consumer protection. they just did not do it well, and we're proposing to consolidate that responsibility in one place so it can be done better. now, outside of consumer protection, we're proposing to make sure the government has the same tools to manage risks it now has in small banks and tlifts for institutions that define our financial system and can bring the economy to the edge of collapse. that's a necessary function for governments to do because banks can pose enormous risk. if you don't constrain the risk taking of banks, we'll be con signed to repeat the crisis we just went through. >> i yield back.
>> the gentleman from california. >> thank you. mr. secretary you submitted about 900 pages of proposed legislation. i strongly agree with well over 90%. i commend your work and that of your staff and the chairman and his staff. i hope my colleagues have gotten this "dear colleague" letter i've distributed. if anybody doesn't have it, please ask me. i do have a few extra copies. mr. garrett has already put it in the record. unfortunately, you've got in here what i call t.a.r.p. on steroids. you've got permanent, unlimited bailout authority. this is the most unprecedented transfer of power to the executive branch to make decisions about both spending and taxes in history, all without congressional approval and a sharp departure from our constitutional values. and depending upon what some future executive chooses to do, it authorizes the greatest
transfer of money from treasury to wall street ever. the bill allows for the bailout of both solvent and insolvent financial institutions. and mr. secretary, last time you were here, i asked you to embrace a $1 trillion limit on this total bailout power, and i'm still waiting for that embrace. specifically section 1109 allows the executive branch to loan unlimited amounts to any solvent financial institution. when such a loan is made, the executives keep their jobs, the shareholders retain ownership of the company, and their shareholder company value is dramatically enhanced. section 1604 allows for the bailout of troubled financial institutions with unlimited loans and unlimited investments in the equity of the troubled firm. now, when the troubled institution gets bailed out, the
chief beneficiaries are its creditors. this will cause creditors to lend money on favorable terms to the systemically important institutions. because after all, if the institution fails, the creditor will probably get paid by the government. however, the share hold erls of the bailed out institutions also stand to benefit handsomely. the taxpayer takes the enormous risk, perhaps investing in the entity or lending money to it. if things go well, the taxpayers get their money back and the shareholders get a previously comatose and now revived giant institution that they resume ownership of. section 1109 and 1604 provide a multi-step process for bailouts. the first step is that we transfer billions, perhaps over a trillion dollars to wall street. the second step is that the taxpayers are supposed to get their money back from a new tax imposed on large and
medium-sized institutions. the proposed statute directs th executive branch to get our money back within 60 months, and then specifies "or such longer amount of time as the executive branch decides,"s so it could be 60 years. i find it difficult to think how we would ever recoup from a single financial industry, particularly one in extreme miss of the hundreds of billions of dollars which might be necessary to repay the taxpayer from the next bailout. the executive branch is empowered -- look at this from a constitutional perspective. the executive branch is empowered to write the new tax law. so how much money is paid by medium-sized financial institution in your district, whether it's $100,000 or $100 million -- is totally at the whim of the executive branch and can go up or down by that factor depending upon what the executive branch wants to do. the law will allow those institutions that are
systemically important to borrow at a lower cost. this will help the largest institutions get lafrnlger so that they become a greater systemic risk. and by becoming a greater systemic risk, such an institution become even more bailout eligible, further loweringist cost of funds. those institutions that are medium-sized are going to have to pay whatever tax the executive branch chooses to impose. however, they're not going to be able to get money at lower rates because savvy investors are not going to believe that local, regional banks are going to get bailed out. so the medium-sized institutions will fund the program which benefits only their large competitors. it's like being forced to pay insurance on your competitor's business while yours goes uninsured. now, this tax is sometimes referred to as polluter pays. it's hardly that. the financial institution that is the polluter, the one that took big risks and became
insolvent pays nothing. instead the prudent financial institutions have to compete with the high flyers in good times and pay to bail them out in the bad times. i yield back. >> the gentlewoman from west virginia, ms. cav know. >> mr. chairman, am i going to have a chance to respond? >> if there's no objection, we'll take a minute to respond. >> very briefly -- >> let me say to the secretary you will probably have many opportunities to respond to mr. sherman. >> i think congressman sherman we agree on much more than 90%. if what you are describing is something i would oppose. it is not what we have proposed. and i share very much your basic concern that we not create a system that would create those risks. i would be against that. i would not support it, would not want to have to live under it and administer it. it's just not the proposal we're describing. >> if the secretary wants to correct in of my statutory citations, i hope he does for
the record. i yield back. >> the gentlewoman from west virginia. >> thank you mr. chairman and mr. secretary. quickly, i would like to ask, are you now imposing larger capital requirements on the systemically too-big-to-fail institutions at this moment? >> the current rules which are old and outdated and did not work do establish slightly different ones, but they're not conservative enough, aren't tough enough and weren't provided more broadly enough. >> so you are or aren't requiring higher capital? >> they're somewhat different than would apply to community and regional banks, but not different enough and not conservative enough, not designed well enough, not applied broadly enough. >> let me go to gmac which announced yesterday the treasury was looking seriously i guess by november to decide whether to do another infusion of them of taxpayer dollars on the third time. and they're under this regime of trying to raise more capital.
is that correct? how would this bill be different in terms of gmac? >> this bill has nothing to do with gmac. >> let's put them under this bill. >> it wouldn't fit. >> wait a minute. >> let me explain and clarify. this is very important. my predecessor, the secretary of the treasury made the judgment under the authority that congress gave him in the fall of last year, in the middle of the worst financial crisis in three generations to lend money to two automobile industries and two auto finance companies including gmac. when i came in, we put the major institutions including gmac through a very tough stress test, forced them to disclose what their losses might be, how much capital they would need in the event of a worse recession. at that time we disclosed to the market and to the world including for gmac what their likely capital needs would be. and we committed in the event that were not able to raise capital for the market that the
government would put that capital in. gmac, at the time there was not prospect they would be able to raise that capital for the market. all the other institution ins contrast have been able the to go out and raise that capital from the market. the only thing we're doing is making sure we follow through on that commitment and, in fact, although i don't want to go into any detail here. in fact, we're likely to have to put in less capital than we expected. now, no government should be in the position of having to do this kind of thing again. and we want to make sure that our role in those institutions is limited. we're not in there a minute longer than necessary. we get the taxpayer's money back as quickly as possible with interest. that is what we're doing for the major banks already where you've seen $70 billion in capital come out, more than $12 billion returned to the taxpayer on those investments. we're going to work very, very hard to unwind those positions as quickly as possible. those initial judgments were not my judgments, although i support them. we'd like to make sure we get out of this as quickly as i can.
>> the fact is this is the third infusion of t.a.r.p. fund taxpayer dollars into gmac. i don't know what category they would fall in. i would say that i think the adaptability issue that you talked about on the resolution, i would like to see an enhanced bankruptcy resolution that provides that partition from the government into the court systems. i think we can create an enhanced bankruptcy through our court system that could address these adaptability issues and the gmac issue and other issues. and even some of your fellow presidents of the federal reserve have spoken in favor of this because, and i'll just take one quote, there's a widespread belief that public funds will soften the blow to private kret tors. i think this is an option we need to look at this as we're working this through. my last question and clarification would be the whole secrecy issue here.
you even in questioning the gentleman from alabama basically said once everybody is required to have larger capital requirements, those will be out in the public realm. there really is no secret in washington, d.c. too long or too easy to keep. so i think we think that there will be in the public domain knowledge of these institutions, and there will be -- they will be in a separate class from our community bankers, our credit unions and our other financial institutions. i think that's problematic. because i think that does bring about, whether it says it but if you want the big banks to have tougher requirements, you want them to have different standards, then you have to hold them to tougher standards, and if you do that, they will disclose how much capital they have, and that is a good thing, not a bad thing. >> your time has expired.
we can get a couple of questions in, and after that, we will have to excuse the secretary. we can go to the gentleman from new york, the gentleman from texas. the gentleman from new york. >> thank you, mr. chairman, and thank you for your hard work, and thank you, mr. secretary. that we pass this bill. let's say that we pass this bill five years ago. but we passed this bill five years ago. i would like to know, one, do you think that the lead in bankruptcy would have still occurred or if it would have been averted, and two, could you tell us how it would have played out differently than it did two, if it had -- than it did? t actually did? specifically how and why would systemic as a whole have been better able to withstand the shock? and what would have been the consequences or the sequence of
events from the moment of the precarious state of the firm was identified to when the resolution plan for the firm would have been implemented? finally, how long in your opinion would the resolution of such firm have taken place and how much would it have cost the taxpayer? >> complicated questions and i won't be able to do them justice this quickly. let me make a quick attempt. if this set of authority and constraints had been in place ahead of this crisis, then you would not have had aig, would not have had the world's largest investment banks, would not have had firms like countrywide and a bunch of other thrifts across the country, take on a level of risk that they could not manage. that would have been preventable. you would not have allowed a bunch of insurance companies to write a bunch of commitments in derivatives they didn't have capital to support. that would have been enormously effective in limiting the buildup of pressures that helped build up this crisis.
you would not have let this terrible set of practices in mortgage underwriting get to the point they did. they would have been arrested more quickly. people would have been held to a level playing field with tougher requirements to constrain risk taking. now, firms will make ris takes, even within a regime designed well like that. if they dorks what this the regime would allow for us is us to take a firm like lehman and have that put them out of existence, have the good businesses sold off, have them resolved in a situation that would have caused less risk of broad panic and not put in the position where you had millions of americans, millions of investors, people who held pension funds, municipalities, money market funds that funded lehman would not have been exposed to that scale of losses and you would not have had the extent of panic that you saw last fall which threatened the viability of a whole range of
institutions. in that case what happened s because the authority didn't exist, the government had to come in and do much more dramatic things, created much more risk of moral hazard, provided much more protection to firms that should not have been exposed to those protections. that's the basic rationale for this framework and that's what it will provide. we'll have firms in the future to make mistakes, but we don't want those mistakes to come at the expense of well-managed institutions and the expense of the taxpayer. >> i want to go in the short time i have, two other things that i'm concerned about, of course. one of the major challenges in dealing with systemic risk going forward will also be the international coordinate and what will be necessary to handle systemic risk posed by fannie and through firms with a global footprint. could you please clarify for me how this plan before us today would manage the systemic risk posed by firms for which we are the home country, i.e., the
firms that are headquartered in the united states but have major operations internationally and for those where we are the host country from financial firms headquartered abroad but have major operations in the united states? >> very complicated but excellent question. two quick responses. these constraints on capital, on funding, on leverage, on risk taking, they have to be negotiated and applied internationally so there's a level playing field. you want to make sure that other major institutions that compete with u.s. institutions but are swiss or german or british are held to the same standards. now, in the event -- again, they manage themselves to the edge of failure, to make sure in each of these major financial centers you have the types of authorities we're proposing congress establish in law today, if you have that authority to better manage failure, you can better manage the unwinding disma
dismantlement of these major globally active firms. once we have these national authorities in place, we're going to have to do a better job of coordinating that was possible in the lehman case for example. the real problem with the lehman case was the absence of resolution authority both here and in the u.k. frankly. so establishing at the national level first is probably the most important thing to do to achieve the objective that we both share. >> the gentleman's time has expired. gentleman from texas. >> thank you, mr. chairman, mr. secretary, welcome. chairman frank and i will continue to debate the effectiveness of the gse legislation that he brought to the congress. what the facts are today, we have essentially 80% government control of fannie and freddie, conforming loan limits have increased, increasing their exposure. their market share has increased precipitously. taxpayers between the taxpayer and the federal reserve have now roughly a trillion dollars of exposure out of a potential of $2 trillion. does the gse plan to offer reform legislation before year's
end? >> no. but i am looking forward to that discussion with you. you're absolutely right, that the system we have in place we can't live with going forward. that's why we've committed -- >> is there a timetable for the administration to propose gse reform legislation? >> what we have said is we believe early in the year we're going to outline at least our initial ideas on options for how they do that. we need to begin that process soon. i agree with you and i look forward to it. >> thank you, mr. secretary. i understand i believe the administration is endorsing the chairman's bill that we're discussing today. did i understand that from your testimony? >> we worked very closely with the chairman of the bill. as i said, we think it meets the critical test in the strong package of reforms. >> initially under this bill then, taxpayers would shoulder the initial burden of too-big-to-fail. then i believe that we hope the institution may be resuscitated, they may be able to pay. eventually if that doesn't
happen, competitors may end up having to foot the bill. this not your understanding. >> resuscitated is the wrong word. as i said in my statement, and the chairman said this, too. you don't want the government in that context to act with the objective of saving the institution to allowing it to live for another day. that would be a mistake. what you want to do is make sure they live with the consequences of their failure and they can be unwound and sold and disassembled b. >> i used the chairman use the phrase death panels again in his opening statement. i've been able to read the 253-page bill. i do not believe that that type of resolution is required. it certainly is permitted. i did not see where it was required. perhaps i've missed that, in the bill. if that is the ultimate goal. >> that's our objective and i think it's a very important objective. >> i agree. let me ask you this question, mr. secretary. in thinking through this idea that firms that are in the
marketplace will be able to either repay back money or their competitors will, do you believe -- what portion of the $128 billion that aig has received do you believe ultimately they will be able to pay back? >> you know, we're in the process now required by law to provide a comprehensive valuation of the range of actions the government was forced to take in this crisis, both my predecessor and me. we'll be putting out the report in mid december. >> do you have a range now of what you expect the taxpayer -- >> i'll give it to you soon. >> how about with respect to general motors and the roughly 63 billion. >> in the same case. we'll provide a set of independent assessments of what the range of potential losses and gains are across those programs. >> mr. secretary, we've had this discussion before about what was written into the statute. the bottom line is gm and chrysler defacto had been considered financial institutions under the t.a.r.p. statute, have received extensive
government funding. we're designated essentially systemic firms. to many of us that suggests that ultimately the number of perhaps fortune 50, fortune 100 companies that ultimately could receive government bailout assistance is not a fairly -- is not, unfortunately a limited universe. when i think about this regime where one's competitors paid an essentially "clean up your mess," if walmart were to become insolvent, how smart or how fair is it to impose that cost on target and costco? >> right now, congressman, who bears the cost when firms screw up? what happens now is, is that companies, families, businesses, taxpayers, community banks bear that cost. we're proposing to change that for the simple reason it's not fair. and what is fair, we believe, is that in the end, because banks
are special and risky, if they manage themselves to the point where they're imperilling the system, if p they're exposed to any lost. >> should ford bear the cost of compensating the taxpayer for what happened to gm and chrysler? >> i think you're making a good point. but you have to look at the alternatives. the alternatives to what we're proposing which is based on the existing frameworks for banks and thrifts. under the laws of the land established by congress, what happens is if the government has to act to close an institution and it's exposed to any loss, it imposes a fee on banks. it's just -- it's very simple. it's compelling and better than the alternatives. >> the gentleman's time has expired. the gentleman from alabama has a brief request. >> unanimous consent request, i'd like to submit for the record a series of questions to secretary geithner on various aspects of this highly -- >> without objection let me say that same will be extended to any member.
>> and to get the answers if possible or employs the treasury to aeggg!g!g===rw@ [captions copyright national cable satellite corp. 2009] [captioning performed by national captioning institute] >> up next on c-span, developments in congress on health care legislation. house democrats hold an event outside of the capital to unveil
their proposal. then, we will get reaction from house republican leaders. then later, president obama comments on the democrats' plan at an event for small-business owners. the house financial services committee looks into overdraft protection tomorrow morning. members are considering a bill that would make overdraft fees reasonable and limit their number. witnesses include representatives of bankers, credit unions, and consumer groups. that is live on c-span at 10:00 eastern. >> this weekend on c-span2 "book tv," the interrogation techniques used by the cia in the war of terror. the four books that caused the cold war. get the entire weekend schedule at booktv.org.
>> democrats in the house today presented their health-care bill at a ceremony in front of the capital. speaker nancy pelosi says the bill provides coverage for millions more americans and costs less than $900 million over 10 years, and there is the government-one insurance plan, also known as the government option. >> it is with great pride and great humility that we come before you to follow in the footsteps of those who gave our country social security and then medicare and el universal, quality, affordable health care for all americans. -- and now universal, quality, affordable health care. this is an historic moment because of the work of our three great chairman of the committees and the house. chairman charlie rangel of ways
and means. thank you, mr. rangel. [applause] chairman henry waxman of the energy and commerce committee. [applause] and i think that george miller has a hearing. chairman george miller has a hearing, as do some of our other chairs and members. they are having hearings because the work of congress does not stop because we have an important message to give to you, but i am very grateful for the cross-section of members that we have here, geographically, philosophically, from all of the committees at jurisdiction that worked on this legislation and also members of the caucus who participated over and over again under the leadership of our chairman john larsen and our vice chair of the year as sarah -- javier becerra.
it is really over a century where starting over a century ago with president theodore roosevelt. he fought for health care and health insurance reform. today, we are about to deliver on the promise of making affordable, quality health care available for all americans. [applause] laying foundation for a brighter future for generations to come. the affordable health-care for america act is founded on key principles of american success. opportunity, choice, competition, and innovation. we have listened to the american people. we are putting forth a bill that reflects our best values and addresses our greatest challenges, and we are putting it online for all americans to see. here is what our health- insurance reform legislation will mean to american families, workers, and the economy. here's what our health insurance
reform legislation will mean to american families, workers, and the economy. thank you, insurance companies of america. [applause] this is why this legislation is important. affordability for our middle class that lowers cost for every patient, reins in premiums, co-pays, and not both, limit out-of-pocket costs, and lift the cap on what insurance companies cover each year. affordability for the middle-class, security security for our seniors by strengthening medicare, secures the financial stability and solvency of medicare for years to come, provide seniors with better benefits and guaranteed access to their doctors. and in this legislation, we will immediately begin to close that doughnut hole.
[applause] affordability for the middle class, security for seniors, responsibility to our children. it reduces the deficit, meets president obama fought to keep the cost under $900 billion over ten years and it ensures 36 million more americans. 36 million more. [applause] as i said, the bill is fiscally sound. it will not add one dime to the deficit as it expands coverage, implements key insurance reforms, and promotes prevention and wellness across the health system. the bill will expand coverage, including a public option to boost choice and competition in the health insurance reform. [cheers and applause] it covers 96% of all americans and to put affordable coverage in reach for millions of uninsured and underinsured
families, lowering health care costs for all of us. [applause] one other very important feature is that it will end discrimination for pre-existing medical missions. [cheers and applause] it opens doors to quality medical care to those who were shut out of the system for far too long. and because of the work of our members and our meetings across the country, we know that prevention and wellness are important parts of this legislation and it puts a major new emphasis on preventative care, expand access to screening and other achievements to keep americans healthy and promotes workplace wellness. the drive for health care reform is moving forward. the affordable health care act will ensure, again, affordability for the middle class, security for seniors, and responsibility to our children. as we continue to move to the
legislative process, is critical to remember what this means to the american people. today we will hear stories that serve our inspiration in. we will listen to people whose hopes are our motives for action. our president has said, our progress will be measured by the success of america's families in making progress for themselves. and so these stories are a place i need our attention, we'll have our action, and we look forward to hearing them. we are very proud of the work of everyone in our caucus and all the staff has been extraordinary. the public's input has been absolutely necessary. but a key player from the start, working with our three chairman, courtney did not offer so would arrive at something historic, something that changes the way business is done in washington d.c. by having these three committees worked together and
come together with a bill to make significant change for the better, for the american people. it simply would not have been possible without the extraordinary leadership of our great majority leader steny hoyer. [cheers and applause] >> what a day. what a day for america and what a day for all of our people. and this they would not have happened had it not been for the indefatigable leadership and focus and work out the speaker of the house of representatives, nancy pelosi. [applause] today we are one step further on a long hard road. the road to bring quality on the affordable health care to every
one of our fellow citizens. but in this congress, we are here to introduce a new health insurance reform bill thanks to the commandment to this cause shared by every member of our. i told members of the press and the public over and over and over again there is not one member of our caucus from every region of the country who did not say to us, we need to adopt health care reform. for americans struggling with the cost of health care, this is an urgently needed though. but befitting the importance of this legislation, the process of putting it together has been delivered if, transparent, and open. the most alliterative, transparent, and open process i have seen for any bill in my 29 year career. we've held over 100 hearings on health care expenses 2007.
this year alone, under the leadership of the chairman of our caucus, john larson we felt close to 3000 health care events in our district and every part of our country. three committees have spent 160 hours under the leadership of charlie rangel, henry waxman, and george miller. marcus on health care legislation has been held openly with all types of amendments offered in disgust. much of the legislation is being announced today has been available for review and comment for over three months online so that every american can read it and give us their input. and the members of the democratic caucus have listened to our public. and yes we're here at a euro store time when for over half a century a family selected by their citizens to come to this
congress have raised the banner of health care for all that they could afford. i want to congratulate my friend, the principal sponsor of this legislation, john dingell of michigan. [cheers and applause] we will keep our promise and commitment to the integrity of this process by making the bills .-full-stop which will be online at the speaker said as we speak. and the manager's amendment to make sure we have this exactly right publicly available for 72 hours before the members are asked to vote and by ensuring a full for debate. health insurance reform has come through all that scrutiny and debate a stronger, that her bill
because this is an idea whose time has come. this is an idea that we will enact. this is an idea that will lift up all americans and give them the affordable, quality health care that they can count on. [applause] we know that seniors in america are particularly concerned with health care. i'm one of those seniors. don't tell anybody, please. here to talk about seniors being advantaged by the passage of this bill is my good friend, a member of the educational labor committee, deeply involved in the fashioning of this bill, the gentlelady from new hampshire, carol shea-porter. carol. [applause] >> good morning.
i'm very pleased to have a senior with me from the great state of new hampshire, priscilla king and her husband bernie has been hurt by the medicare part d prescription ... tall and so i'm honored to introduce her to tell her story. please come out, priscilla. [applause] >> my name is priscilla king. i'm 70 years old. and a member of the alliance for retired americans from new hampshire. my husband bernie and i have been struggling for years to afford our prescription drugs. between the two of us, we must take 13 different medications each day, sometimes two or three times a day. we live on social security and after all the bills are paid, we have less than $100 each week for food and gas and everything else.
i am proud that my state representative, carol shea-porter, is helping to make prescription drugs more affordable and by closing the medicare donut hole. [cheers and applause] we have gone into debt because of the times we have fallen into the donut hole. i think it's wrong that when you are in the donut hole, you must be playing your premiums would get no benefits in return. can you imagine buying a meal at a restaurant but only getting an empty plate? i want to thank speaker pelosi, representative shea-porter and everyone here for standing up for seniors and closing the doughnut hole. american seniors need help more than the big insurance companies do. we must pass this bill right away. thank you. [cheers and applause]
>> thank you very much, priscilla. and i were to senior citizens for many years and her story was all too familiar. millions of our seniors are affected by the prescription drug doughnut hole, a coverage gap which affects roughly one and fix medicare part d enrollees. this gap exists between a threshold where sender benefits run out at $2700. but before catastrophic coverage is jiggered is the $6200. this health care bills will change that. the affordable health care for america america act begins closing the part d doughnut hole on january 1st, 2010 and will completely cold set a 2019. the doughnut hole will be reduced by $500 in 2010. our seniors who do fall within the doughnut hole will also benefit from a new 50% discount on their namebrand drugs. this will put money back into the rockets of millions of seniors who've been unfairly
affect did and in priscilla and bernie's case help them afford the medications their doctor thinks our bass. but that's just for starters. this bill includes primary care for seniors on ensuring our seniors have access to and can spend more time with their primary care doctor. in making sure their care has been upward needed to ensure our seniors get recommended treatments on a particularly for chronic diseases. as priscilla has testified today, doing nothing to help improve medicare is the scariest option of all and america's seniors understand that. i am now pleased to introduce congressman, you from virginia. [applause] >> thank you, carol. one of the big challenges of health care in the united states in terms of affordability and even access has to do with that many, many small businesses and
our governments that no longer can provide health care for their employees. as recently as ten years ago, over 60% of our small businesses is activated health care for their employees. that percentage is now down to 40% and if we do nothing, that's going to go even lower. leaving millions of americans working for small business engines and employment growth in america stranded without health care coverage. i'm pleased today to introduce dan chery, dan is a small business owner with an engraving company in suburban chicago and illinois. and he's going to tell his story is about the issue of affordability for him and his and and [applause] >> madam speaker, thank you very much for inviting me to participate in this historic event. as you know, health-care reform is absolutely essential for
america's small businesses. i own a second-generation in graving business. i have never been able to afford health care for my employees, and even for my family after paying into it for over 20 years, we had a hectic summer, and i missed a health- insurance premium, the first time in 20 years, and my insurance company cut off and said i had to reapply, and that turned my high cholesterol into a pre-existing condition, and i am on insurable, and for those of you who know what that means, i realized after a leticia my options that the only way that i can protect my family from disaster, and i am human. i will have a disastrous some joint, but it would be to divorce my wife and give her my assets. that is why i am here today. the legislation being introduced today is critical to be able to protect our businesses and
families from the threat of crippling health expenses. this bill will eliminate exclusions based on pre- existing exclusions and other underwriting practices that make insurance unaffordable for us. nderwriting practices that make insurance unaffordable and unacceptable for us. by creating an exchange that includes the choice of a strong public health option, this bill will provide access to affordable, comprehensive coverage. most small businesses will be exempt from any requirement to recover -- offer coverage but we want to offer coverage. it's the right thing to do and it's important for us to be able to be competitive with companies that do offer it. the tax incentives in this bill will help us get a that's good affordable coverage. for my business to continue to grow and be competitive is important for me to be able to offer health care for my employees. her like family to me like most small business owners and other responsibility to make sure they have a health care they need. that's when so proud to have the opportunity to stand here today
to express my starr report for this landmark legislation and my gratitude to the madam speaker into all the other members for what you've done. america's small business needs to pass legislation to make health care work for us. that's what we need now. thank you. [applause] >> thank you, dan. thank you for sharing your story. you just heard about the struggle of one small business owner to afford health insurance for his employees. subject to outrageous premium increases and capricious to buy insurance company hard-working americans like dan across the country are either unable to provide coverage because of the cost or sinking under the weight of rising premiums. and the last ten years, premiums for small businesses in america have more than doubled increasing by 129%. small businesses need health care reform, as dan said, they needed now. the affordable health care for
america act allows small businesses to participate and health insurance exchange is giving them the benefits of large group rates on a lower cost, and many more choices. it raises the threshold on income surcharge to 500,000 for individuals and 1 million for families, something we freshmen members of congress worked awfully hard to get in the bill and i want to thank the speaker for her help and assistance in making that happen. [applause] it provides tax credits to help small businesses afford to provide health insurance coverage for their employees and as dan said, for so many small-business owners in this country, their employees are like members of their family. they want to do the right thing, they want to provide this benefit to their employees. in august a great pleasure to introduce one of the great leading lights in the united states congress, a thoughtful and articulate leader, our majority whip, just clever of south carolina. >> thank you. thank you very much congressman
connolly. it is a very personal issue for all of us. everyone here knows someone who has struggled to get adequate health care or have suffered discrimination because of a chronic illness or disease. so-called pre-existing condition. we want to make those realities a thing of the past. one person whose personal health care experience brought her from columbus, ohio, straight to the united states house of representatives. she is here with us today, a leader, with a long history of the community after kids of health care, a friend, our colleague, congressman mary jo kilroy. [applause] >> dank you, everybody.
thank you. i want to thank mr. clyburn. i want to thank all of the democratic leadership, particularly speaker pelosi. thank the committee chairs for bringing a to this day. a huge step closer to providing health care that is affordable and accessible to all americans. and as you heard, for me this is personal. as mr. clyburn said it is personal for many americans. as many of you may know i've been diagnosed with multiple sclerosis. and i've been lucky because i've had the benefit of health insurance because of those group plans i've been able to afford the medications that delay the onset of disability and slow down the progress of this disease. but i also know that many people, that is not the case. they are excluded from the health insurance system because
they have a pre-existing condition and can't afford the medications that will be able to live -- allow them to live their lives to the fullest, enable them to pursue their dreams the way they want to do that. i remember when i was running for congress there was a young man who worked on my campaign who also had a nice and he told me one day, their election day that he was working for me and she thought i was running for congress so that we could reach this day where we could have health care reform that we really meaningful for people like sean and people like me and people with pre-existing conditions. and not just multiple sclerosis, other autoimmune diseases or the mother whose daughter has cancer in remission and is worried because she's new and the work is, doesn't have health care yet and that cancer history could
preclude her from getting the preventive care and monitoring her condition, making sure if need be she got the treatment she would need. the mothers with asthma, the people with diabetes. for all of us, for all of us americans, this is a great day, a big step forward to having real health insurance reform. and i can't wait for the day when we actually get an opportunity to vote for health care reform and thank you very much for getting us there. thank you. [cheers and applause] >> thank you very much, mary jo. what does quality, affordable health care mean to you under this new bill? first of all, it means consumer protection, holding the insurance company accountable and peace of mind for you and your family.
here's what happens immediately under this bill. the uninsured will have access to a temporary insurance program called a high-risk pool from the date of an act meant to be exchanged is available. [applause] from the date of enactment, insurers will be prohibited from dropping your coverage if you get sick. [applause] from the date of enactment, you will hinder price gouging with sunshine requirements on insurance companies to disclose insurance rate increases from the date of enactment a cobra health insurance coverage will be extended until the exchange
is available and displaced workers can have affordable coverage. [applause] now after 2013, and the mandate for coverage and the exchange are in place, you'll see these additional reductions: no more co-pays for routine checkups and preventive care. [applause] told the yearly cap on your out-of-pocket expenses. [applause] no lifetime or yearly cap insurance companies will cover. [cheers and applause] and has been said so often and into discrimination before because it existing conditions like diabetes, heart disease, or
ms. [applause] and i want now to introduce another member from the great buckeye state of ohio, marcia fudge. [applause] >> thank you. women are among those who stand to gain the most from health insurance reform. we pay more. we get less and some of the ways we are treated by insurance companies is just criminal. jody miller from maryland has her story to share with us today. [applause] >> thank you, representative fudge. my husband and i married more than a decade ago and immediately began trying to have children. after a year of unsuccessful attempts and been diagnosed with unexplained infertility, we
chose in vitro fertilization as the method to build our family. at that time our insurance plan did not cover ivf with the exception of some of the drugs. we paid approximately $22,000 out of pocket to conceive our children and in may of 2000, our triplet sons were born. [applause] this year we took a serious look at our family finances and realized that our health insurance premiums are an individual policies are costing us nearly a third of our net income. since we cannot afford such a cost, we researched other health plan options that might be more affordable and decided upon a health savings account. we applied to care first blue cross blue shield. we were told that our three children had been accepted into the policy, but that's my husband and i were not. the reason, pre-existing medical
divisions specifically for myself infertility and for my husband spousal infertility. if it wasn't so alarming, it would almost be humorous. i've never heard of infertility as a pre-existing condition, but even more absurd with spousal infertility. our spousal cancer or spousal hav terms that are used to? the incredible irony is that our need for ivf was not considered a cover of all middle school conditions that we paid out of pocket and now more than ten years later, we are being denied health insurance for that very same reason. madam speaker, members of the congress, i am pleased to be here with you today to say we need health insurance reform for families like mine. we must be able to find affordable health care for families that provides for a needs without costing a third of our income. and we must not be denied coverage for a pre-existing
condition. the insurance companies must hear that women -- or that a woman who wants to be a mom is not a pre-existing condition. [cheers and applause] our current system is obviously not working and i hope that congress will move quickly to resolve this national problem. thank you. [applause] >> america's affordable health choices act will revolutionize health care for women. ending the discrimination we face under our current system. more than 14 million american women, who purchased health insurance in the private market last year pay up to 48% for in premium costs than men. insurance companies routinely practice what they called gender rating.
and that permits them to charge men and women different premiums for the very same coverage. america's affordable health choices act will make generating illegal. never again. [applause] .. and protect us from high and potentially unmatchable out of pocket health-care costs. this bill will improve health care for not only women but for all americans. thank you. [applause]